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Peter Thiel vs. Marc Andreessen: Is Innovation on the Decline?

The two famed VCs hash out the current state of innovation in technology at the Milken Institute.
Peter Thiel (left), Marc Andreessen
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Is technological innovation accelerating or on the decline? 

Marc Andreessen, founding partner of Andreessen Horowitz, and Peter Thiel, co-founder of PayPal and Founders Fund, batted around the question in a Milken Institute panel discussion Monday. During their hour together on stage, the duo spoke of their contrasting views on the value of the tech world’s most recent creations, whether communicating in 140 characters is a worthy endeavor, and why clean tech is stalling.

Innovation is stagnant, Thiel asserted, because recent tech creations aren’t useful. “It’s being used to throw angry birds at pigs, sheep at one another, to send pictures of your cat to people halfway around the world,” he said. “We may start to question whether technology’s perhaps not quite lived up to its promise from the past.”

He added: “When people made fun of the Wright brothers or the inventors of the automobile, they were making fun of it because it was strange and different. And today the jokes are driven because it is small and trivial.”

The question, Andreessen responded, is one of perspective.

“In history the great innovations of the past are now well understood as being very, very important. It’s now very obvious. It’s very obvious the innovations of the past that turned out to be very important. In almost every case they were not understood as such at the time. In fact, I assert that they were often viewed as trivialities or jokes.”

Andreessen also good-naturedly jabbed at Founders’ Fund’s slogan: “We wanted flying cars, instead we got 140 characters.” While Twitter may be an easy target, “because a lot of Twitter is about what your cat had for breakfast,” he said he believes this perspective trivializes what is happening in communication technology. Twitter, which Andreessen described as “public global messaging for free,” is, he believes, a big deal.

“The whole basis of our civilization, in my view, is communication,” Andreessen explained. “Without communication we would all be sitting in caves by ourselves, unable to do things, unable to learn about things, unable to form into groups. And the ability for people to be able to communicate… is a very big potential setup and platform for what happens over the next 30 years.”

Where the duo did see eye to eye, however, was on government intervention’s impact on transportation and energy innovation.

Tremendous oil and gas subsidies, Andreessen asserted, make it extremely difficult for clean tech entrepreneurs to get their prices low enough to be competitive. “The clean tech alternatives get to within about 2x of the price performances they would need to be at in order to replace oil and gas, then they stall out because of the subsidy imbalance.”

“I’m actually very sympathetic to Marc’s point that there’s a big government regulatory problem,” Thiel replied. “We live in a world where the world of stuff has been regulated, and the world of bits has not been regulated.”

“We’ve been punishing engineers in this country for 40 years, people are not allowed to build things," he added.

Last updated: May 2, 2013

JULIE STRICKLAND | Staff Writer

Julie Strickland covers start-ups, small businesses, and entrepreneurial endeavors of all kinds for Inc. Her work has been published in Brooklyn Based and City Limits in New York, the Free Times in Columbia, SC, Real Travel Magazine in London, and Daegu Pockets in South Korea. She lives in New York City.




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